The growth of Mobile Virtual Network Operators (MVNO) is a global phenomena. In the next few years the sector is expected to grow by 9% YoY, and will constitute around 10% of the total mobile market, estimated at 500M users globally by 2023. This growth is driven by higher number of devices per consumer, as well as younger internet savvy users entering the market. The “low-cost-high-data” plans hence become the engine to MVNO growth success.
This good news story however seems impeded by an arguably non-sustainable commoditised business model. Investment to expand mobile infrastructure by the Mobile Virtual Network Enablers (MVNE) continues to grow, passing on the costs to the MVNO, while the downward trend on consumer pricing accelerates. How does the MVNO profit margin look like in 3 years time ? Is it strategic for MVNO to offer similar services as the traditional mobile operators who are often themselves the MVNE ? Is the business model of charging users for network access fee sustainable ? Can MVNOs be profitable under these conditions ?
At Kakku, we believe there is a strong business case behind advertising supported mobile plans. Advertising revenue could significantly increase the MVNO profit margin. The greatest challenge in such mobile plan however depends on customers’ acceptance and tolerance to advertising pushed by the MVNO.
Users today are accustomed to seeing online ads either in-app or in-web. Below are some tips on displaying ads to users without being intrusive or annoying:
- No to “take over” format ads, i.e. interrupting users experience in order to display ads to them.
- No to ads that block users activities, i.e. must see an ad before the user can proceed.
- Yes to interstitial format ads. This is when ads are displayed in-line with original content without taking over the original content.
- Yes to creative and attractive format ads. Users like to see new and innovative contents and would more likely interact with the ads.
- Do not overload users with excessive, non-targeted ads. If possible, help users block out unwanted annoying ads.
The aim is so that users are unable to differentiate generic online ads against MVNO pushed ads, while the user experience is not negatively impacted.
The success of an advertising supported mobile plan vitally hinges on the fine line between a good or poor user experience.
Find out more about Kakku ad insertion solution for MVNO.